Out-of-home advertising is a significant part of the advertising market that includes essentially all types of advertising that are directed to consumers while they are outside of their home. Out-of-home advertising thus covers all kinds of advertising other than broadcast, print or Internet media (notwithstanding the fact that people may view one of these types of media while actually outside of their home). Some (non-limiting) examples of out-of-home advertising include (i) billboards (e.g. paper billboards, digital billboards, etc.), (ii) street furniture (e.g. bus shelters, news-racks, mall kiosks, telephone booths, etc.), (iii) transit advertising (e.g. advertising on buses, trains, subways, trucks and taxis; advertising in stations, on platforms and in airports), and (iv) alternative advertising (including all non-transitional advertising such as advertising in bathrooms, in stadiums, on gas pumps, on bike racks, etc.).
With respect to cost, the owners of media used for out-of-home advertising conventionally do not typically charge a flat, fixed price for their media's use. The price of any particular specific medium will vary depending on a number of conventional factors including the population demographics of the market in which that specific medium is located, the actual specific location of that specific medium, the amount of traffic that the specific medium will receive during the course of the advertisement, and the demand for the use of the specific medium. To take an obvious example, the cost of time of a billboard in Times Square, New York City, N.Y., USA at Christmastime, will be much greater than the cost of time of a billboard along a highway in a rural desert area of New Mexico, USA at the same time of the year.
With respect to the amount of traffic that the specific medium will receive during the course of the advertisement, the traditional conventional measure of traffic is termed “daily effective circulation” or “DEC”. The DEC for a particular advertising medium represents the number of adults (persons 18 years of age or older) passing and potentially exposed to the medium over the course of either 12 hours (from 6 am to 6 pm—where the medium is unilluminated) or 18 hours (from 6 am to 12 midnight—where the medium is illuminated). The DEC for a particular medium is calculated by statistical means after having measured the appropriate sample data on which the statics can be based. The DEC can be combined with demographic data of the population in which the advertising medium is based to get a theoretical possible picture of the demographics for the DEC for the medium. DEC has its limits in that it measures only adults potentially exposed to an advertisement and not those that actually looked at it.
A newer measurement (building upon DEC and attempting to overcome its drawbacks) is termed “eyes on impressions” or “EOI”. EOI is an attempt to measure of the number of people who will actually see the advertisement on a particular medium and not just those who will be exposed to the advertisement and could potentially see it. For example, according to CBS Outdoor's website (CBS Outdoor being one of the major participants in the out-of-home advertising market), EOI builds on DEC by “adding context such as size, distance from the road, illumination, and other factors that affect a billboard's impact on a consumer” (speaking in respect of a roadside billboard). (See, https://www.cbsoutdoor.com/tools/resources/eyesonout-of-homemediameasurement.aspx for example, incorporated herein by reference). EOI (at least in theory) provides a more reasonably accurate measurement of the persons who will actually see an advertisement located on a particular medium, at least as far as current statistical models will allow. EOI also attempts to provide the demographics of such persons, which is a better estimate of the demographics of the population that actually looked at the advertisement than using the DEC as described above.
DEC and EOI are important in the advertising industry as out-of-home advertising media are typically priced in cost per thousand exposures or “CPM”. In order to calculate the total cost of running an advertisement on a particular medium per day, one needs to know the DEC/EOI and the CPM; the total cost per day for the advertisement on the medium being the DEC or EOI times the CPM. (In order to facilitate this calculation DEC and EOI are typically expressed in thousands.)
DEC (along with demographic data) or EOI can also be important to advertisers in that they can allow advertisers (or their advertising agencies) to select individual advertising media based on the numbers of people in their particular target demographic(s) that will actually (to the extent that statistics will allow this to be determined), look at the advertisement on the medium.
While using DEC or EOI is a currently accepted method in the advertising marketplace, improvements are nonetheless possible.